Cowen analyst says weight-loss drug Qsymia can't live up to investors' expectations. Company prepares sales launch for later this year.

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The diet pill Qsymia "has the chance to change how medicine is practiced around the world," Wilson told a meeting of analysts and investors this week. "Historically, we have been treating the symptoms of weight gain (and ) obesity for years and years with medicines to treat type 2 diabetes and medicines to treat hypertension, etc."

Qsymia has the potential to make a major impact on diseases by lowering weight, Wilson explains. He promised to aggressively go after patients who he says will benefit from the obesity treatment.

He and other Vivus executives also attempted to allay any concerns that the launch -- scheduled for the fourth quarter of this year -- may disappoint investors if the drug doesn't take off quickly.

Since initially rising to $29 per share after the announcement of Qsymia's approval in July, Vivus' stock dropped by a quarter, trading midday Thursday at $21.81. The shares are still up 124% this year. (Multiple issues from patent concerns to stock sales by Wilson and other insiders have contributed to a decline in recent weeks.)

At the current valuation, Vivus investors may be in for a disappointment, Cowen & Co. analyst Simos Simeonidis says.

"We continue to view the US launch of Qsymia by Vivus as a difficult one to pull off successfully," says Simeonidis, who has a hold rating on the stock.

That's not to say Simeonidis doesn't think the drug will be a success. In fact, he predicts it will be a blockbuster and potentially bigger than rival Arena Pharmaceuticals (ARNA) and Eisai's also approved weight-loss pill. But the hype built around the Vivus drug -- leading to a more than $2 billion market cap -- has created some high expectations, he says. Vivus' inexperience at selling such products may mean Qsymia is slow out of the gate, the analyst adds, a problem that drug and biotech investors have seen in the last couple of years following approvals of promising treatments.

"The initial ramp-up will be slower than some investors' expectations," Simeonidis says, adding that the "shares will be under pressure during the first couple of quarters of the launch."

Vivus executives have yet to announce a price for the drug, but acknowledge that the pill can't be overly expensive. For one thing, the company doesn't expect insurance plans to immediately cover the medicine. Patients will have to pay for the drug out of pocket.

Company officials can also tout their drug as potentially more effective than Arena's not-yet-marketed diet pill Belviq. Both drugs have side effects and Vivus needs to keep its pill out of the hands of women who may become pregnant -- topiramate, one of two active ingredients in the pill, may cause birth defects. Vivus has a risk-mitigation program in effect as part of the US approval of the drug. A third rival company, Orexigen Therapeutics (OREX), is conducting safety studies on its own experimental diet drug.

Wilson acknowledges the sales effort is a huge undertaking, but disagrees that the drug will encounter huge challenges at launch. After all, the company isn't trying to sell a costly biotech drug to a small patient population, he reasons. The risks and rewards of the drug's primary ingredients are well known. The market for overweight adults is huge.

"We have many goals ahead of us," Wilson told investors this week. "We have to deliver this product to patients, and we will not be satisfied until we get the product out."

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